Chapter 89 Someone Wants to Attack Lira (4)

The telegram was from Volpi again. He informed Francesco of the situation and said that he was helpless. Although he had finally gotten Mussolini to give up the idea, the financial system was now experiencing a violent shock due to the rumor. The lira's money supply was tightened, but foreign exchange was more. This was originally a good thing. The tight local currency and the large foreign exchange could just be used to release more money and print more banknotes. However, he knew that this situation was an illusion and was completely caused by rumors. If the money was released now, once these people woke up and exchanged foreign exchange, the lira's exchange rate would be quickly destroyed.

At the same time, Leo also sent a telegram saying that someone in the market was selling a large number of crude oil spot contracts for July, August, and September, driving the price down from $1.2 to $1.1. Although it was normal for market prices to fluctuate, this kind of price suppression was too rapid and concentrated to be reasonable. Moreover, although the United Group itself was producing oil quickly, it would not make such a reckless move. That would be a pitfall for its own pricing.

Francesco and Contini could not come up with any countermeasures. In the end, they had to comfort Volpi and Leo, telling them not to worry and wait and see.

After the telegram was sent, Contini suddenly thought of the foreign exchange issue again. He felt that it was not that simple, so he said: "Send a telegram to Volpiga and ask him to transfer all the extra foreign exchange during this period to the United Bank..."

"President, this is not easy to do, right?"

"What's so difficult about it? Just treat it as a dismantling! Calculate the interest based on the standard of 3 months. This shouldn't be a problem, right?"

Francisco thought that this was obviously a loss-making move, so why should he do it? The United Group would not really use the $1.2 billion in foreign exchange, but would have to pay a lot of interest.

"Do it as I say first, and then explain."

Since Contini wanted to do it, Francisco could only do it first, and then listen to the explanation.

"First of all, this $1.2 billion is the extra foreign exchange this time. I know very well that this is not normal and will be restored soon, but if it is not in our hands, what do you think the Ministry of Finance will do when it faces a squeeze? Will it pay it as required first?"

Francisco shook his head: How is it possible? It must be given to whoever has more power first!

"This will inevitably leave room for rent-seeking, so I have to control it in my own hands and use my own methods to control the flow of foreign exchange. As for the interest..." Contini shrugged, "Just think of it as my contribution to the country. When has the United Group not paid tribute to the national treasury? It's more than the tax paid!"

After receiving the telegram, Volpi agreed to transfer the foreign exchange to the United Bank, but there was an additional condition: it could increase the liquidity of the United Bank, but long-term loans were not allowed to be issued, otherwise it would be troublesome if it could not be collected at the end of three months.

Just as the matter here came to an end, Leo sent another telegram saying that the oil sold had exceeded 30 million barrels and the price was around $1.05. Would you consider entering the storage state?

Contini thought for a while: "We still have 10 days to arrive in Rome. You can issue an announcement saying that the United Group will carry out timely storage. The standard is that the opening price, closing price, and average price of the next month's contract for three consecutive trading days are all below $1. We will purchase it."

This is equivalent to putting forward more stringent conditions, but it also gave the market confidence to boost. Oil prices rebounded in the next two days.

On June 14, new news came out that the oil output of Algerian oil fields has exceeded 10,000 tons per day, and the supply next year will definitely exceed 4 million tons. At the same time, the oil output of Libyan oil fields has also exceeded 3,000 tons. It is expected that the total oil production of the two oil fields will exceed 5.5 million tons, nearly 40 million barrels. At the same time, Romanian and Persian oil fields are also increasing production. Market analysts believe that oil prices may stabilize at around $0.9-1 for a long time, and say that the oversupply in the European market may reach 20-30 million barrels.

As soon as this news came out, it immediately attracted great attention from the market. Three days before Contini returned to Rome, oil prices finally struggled to break the $1 mark and barely closed at $1.01 at the end of the day, but it was shaky. As soon as the market opened the next day, oil prices opened directly at $0.99, and then continued to fall, closing at $0.97 at the end of the day. This was the first trading day that met the storage standards.

The news on the second and third days did not change. Although it rebounded to $0.99, it still failed to break the $1 ceiling. According to Leo's observation, there were at least 40,000 orders at $1 that day.

The good news is that Contini finally returned to Rome, and the bad news is that the stockpiling must be started, otherwise the market will question the credibility of the United Group. Now all major newspapers are looking forward to whether the United Group can really keep its promise.

On the evening of his return, the United Group held a press conference, and Contini said categorically: "The United Group will conduct open acquisitions. We will soon store crude oil for delivery in July. No matter how much, we must play a role in stabilizing the market. During this period, in order to take the overall situation into consideration, the crude oil from the two oil fields of United Petroleum will not be sold to the outside world for the time being, and will be directly stored..."

"Are they really going to store it?"

"Yes, it doesn't look fake, and he only cares about the near-month contract."

"Then throw it to him..."

"No need to throw it, he will absorb it, you see..."

As the traders wrote furiously, they saw that the operation representative of the United Group directly placed a buy order at 0.97, and the first transaction was 20,000 orders representing 20 million barrels of crude oil.

This situation has frightened the market, because if all of Europe takes into account the current supply capacity of United Petroleum, the supply of crude oil is 20 million barrels per month. Does this mean that United Group has taken it all? With these 20,000 orders at the bottom, the trading at the prices of 0.98 and 0.99 is very active. At 2 pm, with Leo's order, another 10,000 orders were directly smashed at the price of 0.99, which directly ate up all the small fish and shrimps trading nearby.

"It looks like a big deal, keep throwing it to him! Throw the August contract!"

This tug-of-war lasted for 4 days. United Group absorbed more than 30 million barrels of crude oil contracts, and then entered July. Now the focus of the market has shifted to the August contract, and the delivery period of the August contract is still 45 days!

This is a deadline that is prone to changes.

"The fish has been hooked, and the foreign exchange can be moved here!"

With Jacob's order, on July 6, the lira began to respond to the call to refute the rumor and exchange for the foreign exchange that was released at the beginning: just 4 days later, Volpi asked Francesco for help. The central bank had less than 40 million US dollars in foreign exchange, and asked them to return the 1.2 billion US dollars as soon as possible.

Contini shook his head: "Tell Volpi that I will not return it before 3 months. The central bank can issue a notice to notify that due to technical failure, Union Bank will temporarily perform foreign exchange exchange business on its behalf... I want to see who is fanning the flames behind the scenes. In addition, notify all Italian banks that large-scale foreign borrowing must be approved by us, otherwise don't blame me for turning my face and being ruthless!"